Statistic Info

By definition, non-renewal rates are higher than gross dollar churn rates. However, it is interesting to see that the non-renewal rates are also higher for shorter duration contracts.

For Entrepreneurs.com

More SaaS + Software Stats

A 2017 SaaS Capital survey showed that young companies actually have higher retention rates than more mature SaaS businesses

The fastest growing SaaS companies scale their organizations rapidly, growing their teams by an average of 56% each year

In contrast to these, the median annual churn rate for smaller, private SaaS companies with less than $10M in revenue is 20%

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

The median Customer Acquisition Cost (CAC) for upsells is just $0.28 per $1, less than a quarter of the $1.18 spent to acquire $1 of revenue from a new customer

Our experiences with SaaS startups indicate that they usually start with a couple of lead generation programs such as Pay Per Click Google Ad-words, radio ads, etc

For a SaaS business of almost any scale, the valuation impact of better retention is in the tens of millions over time

While field sales remains the most popular way to sell for companies >$2.5MM revenue, companies with <$2.5MM revenue tended to use inside sales as their primary mode of distribution

The very best SAAS business has a negative churn rate and will have a Dollar Retention Rate of greater than 100%

Because of the losses in the early days, which get bigger the more successful the company is at acquiring customers, it is much harder for management and investors to figure out whether a SaaS business is financially viable.

More Growth Strategy Stats

Companies with longer contracts (2+ years) reported the lowest annual unit churn

Unlike many other industries, if a software company grows at only 20%, it has a 92% chance of ceasing to exist within a few years

The best SaaS companies achieve 5-7% annual revenue churn – equivalent to a loss of $1 out of every $200 each month

SaaS, and other recurring revenue businesses are different because the revenue for the service comes over an extended period of time (the customer lifetime)

86% of SaaS businesses treat “New Customer Acquisition” as their highest growth priority, both in terms of executive support and funding available

If the numerator of your quick ratio is growing that means your revenue is growing. It’s important to keep increasing revenue to counter any MRR (Monthly Recurring Revenue) that is lost to churn

After $10M in ARR, the median growth rate slows to just under 50%

Companies that spend more on sales and marketing (as a % of revenue) generally grew at a faster rate than those that spent less

The average SaaS business generates 16% of its new Annual Contract Value (ACV) from upselling to existing customers

Software and online services are in a period of dizzying growth